POSCO Kicks Off Malaysian Steel Unit
By Jane Han
Staff Reporter
Korean steel giant POSCO said Wednesday it kicked off POSCO-Malaysia, the name of the company's first steel firm acquired overseas last year, as part of its expansionary drive into Southeast Asia.
The world's fourth-largest steel mill spent $16 million last year to purchase 60 percent of MEGS, Malaysia's sole electrolytic galvanized steel maker, to beef up its supply value chain in the region.
After giving its added unit a new name, POSCO said it raised POSCO-Malaysia's production capacity by 50 percent to 180,000 tons a year.
The facility will churn out steel sheets used to manufacture televisions, DVD players and other home appliances. Major electronics makers such as Samsung and Sony have a presence in Malaysia, demanding about 250,000 tons of galvanized steel per year, but they rely heavily on imports.
``The global economy will face difficulty for some time, but POSCO has endured and excelled every time there was a crisis. This time will be no different,'' POSCO President Yoon Seok-man said at the Malaysian unit's launching ceremony near Kuala Lumpur.
He added that the steel group would try to maximize POSCO-Malaysia's capacity to help steer toward growth.
About 70 percent of POSCO's revenue comes from home, but it has been making aggressive efforts recently to branch out its production and sales networks overseas.
POSCO's cold-rolled steel plant in Vietnam, which is set to begin production in September 2009, plus the Malaysian plant, will help create a production-processing-quality value chain in the Southeast Asian region, the company said in a statement.
This foray into the overseas market comes at a time when the steel maker's expansion plans are facing difficulties after its aborted attempt to purchase a Korean shipbuilder.